This
matter is before the Court on the Motion for Leave to Appeal
(ECF No. 3), filed by Defendant Dane Starbuck
(“Starbuck”). Plaintiff Ron Ross, Chapter 11
Trustee of Skyline Manor, Inc. (“Trustee”) filed
an Objection (ECF No. 4) to the Motion for Leave. For the
reasons stated below, the Motion for Leave to Appeal will be
denied and this matter will be dismissed.

BACKGROUND

Debtor
Skyline Manor, Inc. (“Skyline Manor”) is a
non-profit company that generally provides housing and care
for seniors. On May 8, 2014, Skyline Manor filed its
voluntary petition for relief pursuant to Chapter 11 of the
United States Bankruptcy Code. On May 30, 2014, the United
States Bankruptcy Court for the District of Nebraska (the
“Bankruptcy Court”) entered its order appointing
the Trustee in the bankruptcy case.

On May
6, 2016, the Trustee filed a complaint against Starbuck and
other defendants. In the adversary proceeding, the Trustee
alleged that the defendants other than Starbuck breached
their fiduciary duties to Skyline Manor by (i) causing
Skyline Manor, Inc., to fail to pay payroll taxes; (ii)
causing Skyline Manor to make payments to entities related to
Defendant John Bartle (“Bartle”); (iii) seeking
to recover unauthorized monetary distributions from
individual members of the Skyline Manor board of directors;
and (iv) making fraudulent transfers. The Trustee also
alleged that Starbuck, as general counsel to Skyline Manor,
was negligent in failing to render legal advice regarding
Skyline Manor's need to pay payroll taxes, and failing to
render legal advice regarding various monetary transfers to
the Bartle-related entities and the individual board of
directors.

On July
7, 2016, Starbuck timely filed a motion to dismiss the
adversarial proceeding pursuant to Fed.R.Civ.P. 12(b)(6). On
September 6, 2016, after a hearing on the matter, the
Bankruptcy Court denied Starbuck's motion to dismiss. The
Bankruptcy Court also gave leave to the Trustee to amend the
complaint in the adversarial proceeding to clarify certain
issues. On September, 29, 2016, Starbuck filed this Motion
for Leave to Appeal in the Bankruptcy Court. On October 3,
2016, the Trustee filed his amended complaint. (ECF No. 4,
Page ID 196-306.)

DISCUSSION

District
courts have jurisdiction to hear appeals from final orders of
the bankruptcy courts, and discretion to hear appeals from
interlocutory orders. 28 U.S.C. § 158(a)(1), (3);
see also Big Mac Marine, Inc. v. Jensen, 305 B.R.
309, 311 (D. Neb. 2004). Starbuck does not dispute that the
order he seeks to challenge on appeal is not a final order of
the bankruptcy court. “A party may only appeal an
interlocutory order by filing both a notice of appeal and a
motion for leave to appeal with the clerk of the bankruptcy
court.” In re Coleman Enterprises, Inc., 275
B.R. 533, 537-38 (B.A.P. 8th Cir. 2002). Starbuck has
complied with these requirements and this Court must
determine whether to consider Starbuck's interlocutory
appeal. The Court concludes that consideration of the appeal
is premature because (1) the Trustee filed an amended
complaint meant to address Starbuck's concerns over the
original complaint, and (2) Starbuck failed to demonstrate
that an interlocutory appeal will advance the ultimate
determination of the litigation.

1.
Trustee's Amended Complaint

At the
hearing on Starbuck's motion to dismiss, the Bankruptcy
Court reasoned that the pleading standard for trustees in
bankruptcy is relaxed, and concluded that the Trustee pled
all that was necessary to survive a motion to dismiss.
(Ross et al v. Bartle et al., BK Case No.
16-08024-TLS, ECF No. 60, Audio Recording of Hearing at
15:21- 15:31.) Nevertheless, the Bankruptcy Court agreed that
Starbuck and other defendants needed more information about
specific transfers in dispute in order to defend against the
Trustee's claims. (Id. at 15:52-16:01.)
Accordingly, the Bankruptcy Court permitted the Trustee to
amend his complaint to allege specific facts about the
transfers in question and to address other concerns raised in
Starbuck's motion to dismiss. (Id. at
16:43-17:21.) The Bankruptcy Court ordered the Trustee to
file an amended complaint on or before September 27, 2016.
(Id. at 17:45-50.) On September 19, 2016, several
days before the deadline for Trustee's amended complaint,
Starbuck filed his Notice of Appeal and Motion for Leave to
Appeal the Bankruptcy Court's denial of Starbuck's
motion to dismiss. The Trustee has since filed his Amended
Complaint. (Ross et al v. Bartle et al., BK Case No.
16-08024-TLS, ECF No. 65.)

The
Court will not grant leave to appeal because the Bankruptcy
Court has not considered the sufficiency of the Trustee's
Amended Complaint. On appeal, “where circumstances have
changed between the ruling below and the decision on appeal,
the preferred procedure is to remand to give the district
court an opportunity to pass on the changed
circumstances” Concerned Citizens of Vicksburg v.
Sills, 567 F.2d 646, 649- 50 (5th Cir. 1978) (quotation
marks and citations omitted); see also Phelps-Roper v.
Troutman, 712 F.3d 412, 416 (8th Cir. 2013) (citing
Concerned Citizens of Vicksburg as the normal course
of action on appeal). The Bankruptcy Court granted leave to
amend for the express purpose of addressing the deficiencies
in the original complaint. The Trustee complied and filed his
Amended Complaint. Thus, the original complaint at issue on
appeal is no longer the operative complaint in the adversary
proceeding. Starbuck nevertheless argues in his Reply Brief
that “[t]he allegations in the Amended Complaint do not
correct the deficiencies in Plaintiff's claims against
Starbuck.” (ECF No. 5, PageID 311.) Starbuck provides
no argument as to why this Court should address the
sufficiency of the Amended Complaint, specifically ordered to
address the Defendants' concerns, before the Bankruptcy
Court has had an opportunity to do so. Accordingly, the
Motion for Leave to Appeal will be denied.

This is
not one of the exceptional cases in which leave to file an
interlocutory appeal should be granted. Each of the questions
to be presented on appeal involves application of extensive
factual allegations as applied to various legal principles.
Thus, there is no controlling issue of law on which there is
a substantial ground for difference of opinion. Further,
because the Trustee complied with the Bankruptcy Court's
order and amended its complaint, Starbuck failed to show the
...

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